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529 Plans Keep Getting Better!

Federal Income Tax-free Treatment of Qualified Withdrawals is Now Permanent!

On August 17th, 2006, President Bush signed into law the Pension Protection Act of 2006 making permanent the federal income tax exemption for 529 plan qualified withdrawals.

On June 7, 2001, the Economic Growth and Tax Relief Reconciliation Act of 2001 was enacted into law. The 2001 Act provided certain federal tax benefits that were set to expire on December 31, 2010. The Pension Protection Act of 2006 makes permanent the benefits provided by the 2001 Economic Growth and Tax Relief Reconciliation Act relating to investment in qualified tuition programs.

The passage of the Pension Protection Act of 2006 helps to resolve some uncertainties about current tax law. Many 529 investors have been concerned for some time about the potential expiration or "sunset" of the provisions in the 2001 Act that applied to qualified tuition programs. Because the expiration of these provisions of the 2001 Act would make earnings from such plans taxable upon withdrawal, even if used for education expenses, many 529 investors had hoped that Congress would make the favorable tax treatment permanent. The passage of the Pension Protection Act grants this wish, effectively making the Section 529 provisions permanent.

It's a Great Time to Consider Connecticut Higher Education Trust (CHET)

Connecticut Higher Education Trust (CHET), Connecticut's official 529 college savings program, is designed specifically to help families plan and save for college. It's a convenient way to save money to pay for future college expenses for a child, grandchild...or even yourself!

Higher education costs are steadily on the rise and a college savings strategy is no longer a consideration, but a requirement for today's parent. Now that President Bush has signed the 2006 Act into law, the Pension Protection Act of 2006 will provide potential and current 529 investors the assurance they need to know that tax incentives will remain available.

CHET is Here to Help

The State of Connecticut understands the importance of finding a college savings strategy that meets your unique needs. While costs of college may seem overwhelming, CHET offers an easy and flexible way to save for higher education. CHET is a great way to invest in your, your child, or grandchild's future while enjoying tax advantages.

Find out more, or speak with one of our knowledgeable phone representatives, please call 1888-799-CHET(2438).

Remember, nothing can enrich your loved one's future more than the benefits of a higher education. When you open a CHET account, you are opening the door to a brighter future...

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The tax information contained on the Connecticut Higher Education Trust (the Plan) Web site is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed in the Web site. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

The Plan is administered by the Connecticut State Treasury. TIAA-CREF Tuition Financing, Inc. (TFI) serves as Program Manager. TFI's affiliate, TIAA-CREF Individual & Institutional Services, LLC, is the distributor.

The investment approaches described are not recommendations and do not take into consideration personal goals or preferences. After evaluating information you consider important in making an investment choice, the ultimate decision is up to you. It is a good idea to revisit your investment strategy periodically as your goals, personal financial situation, and market conditions change.

Consider the investment objectives, risks, charges and expenses before investing in the Plan. Please call toll-free 1-888-799-2438 for a Disclosure Booklet containing this information. Read it carefully.

Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.

The State of Connecticut, its agencies, TIAA-CREF Tuition Financing, Inc., Teachers Insurance and Annuity Association of America and its affiliates do not insure any account or guarantee its principal or investment return. Account value will fluctuate based upon a number of factors, including general market conditions.

The Plan Web site is for informational purposes only, and does not constitute an offer to sell or solicitation of an offer to buy any security that may be referenced on the site. Such offer or solicitation can be made only through the Disclosure Booklet.

The Plan Web site contains links to other Web sites. Neither the Plan Trust nor TFI and its affiliates are responsible for the content of those other Web sites. The accuracy of information on those sites cannot be confirmed.